Article - What Is Spread Betting? (21/11/08)

Financial Spread Betting is a tax-free and cost-effective way of trading the financial markets, whether you are speculating on the movement of markets or hedging against adverse movements in your current investment portfolio.

A spread bet is a speculation on the price fluctuations of a range of financial instruments such as equities, commodities, currencies, indices and bonds. You can back your judgement and profit if you believe a market will increase in price or consequently lose if the market falls. Alternatively, you may wish to profit when the price of the market falls and therefore lose if it rises.

The term “spread” refers to the difference between the Buy and Sell price being quoted by your spread betting broker. If you think the price of the instrument will go up then you buy; likewise, if you think the price will fall, you sell. The price movement of the market or financial instrument will therefore determine not only whether you win or lose but how much you win or lose. The further the price of a market moves, up or down, will determine your profit or loss potential.

A key factor to Financial Spread Betting is that you do not physically own the instrument you are simply backing your judgment and speculating on its movement in price.

Spread betting holds a clear advantage over traditional methods of trading. Under current legislation all profits made from spread bets are tax free*. There is also no stamp duty payable on UK market shares and no commission payable on your trades as the dealing charge is already incorporated in the spread. Without these external trading costs, financial spread betting allows for greater transparency, making it considerably easier for you to calculate your profit.

 

*Note: Tax laws may be subject to change

 

 

If you select promotional code Trade4Success in the ‘Where Did You Hear About Us?’ drop-down box when you register, you will be eligible for the following benefits from this excellent trading platform:

  • Up to £250 cash back – refunded against losses during the first 8 weeks of using your account. What a fantastic safety net for new and experienced traders! (For full ‘Terms and Conditions’ please click here)
  • One point spreads – If you are scalping the markets or swing trading you cannot fail to benefit from the tightest spreads in the market (50% less than most other firms!) All of the following are available in exchange hours to make your trading as profitable as possible:

FTSE, DAX, CAC (Rolling Futures Market) - 1 point spread
EUR/USD, USD/JPY, USD/AUD (Rolling Spot) - 1 point spread
GBP/USD (Rolling Spot), DOW (Rolling Future) - 2 point spread

  • Professional trading platform – User-friendly online account management and full telephone support - execute trades by phone or online

Plus competitive spreads on a wide selection of other markets such as Gold, Oil, FTSE 100 / 250 / 300 and US equities.

 

  How To Apply

In order to apply for this account, please visit:

www.worldspreads.com/index.aspx

and select Trade4Success in the ‘Where Did You Hear About Us?’ drop-down box when you register.

   register with trade4success

(This is important as otherwise you will not be eligible for the above benefits or the £250 cash back promotion)

 

 

 

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